How to Make an Old Debt Disappear
- 1). Know what the debt is for. If you don't know what the debt is for, why should you believe someone who calls you and tells you that you owe it. Many scams are based on this exact practice. Gather as much information as you can on the company that is calling you and who was the original owner of the debt. Don't be too surprised if they don't know. The older the debt, the better your outlook. It may be impossible to track the debt, but they need to understand that unless they can demonstrate where the debt originated, you aren't paying a dime.
- 2). Check the Statute of Limitations (SOL) for debt collection in your state. The link to the list is in the tips section of this article. You want to know for sure that the debt is outside SOL and that you cannot be sued for it. (Note: Collection agencies sue every day over time-barred debts. Most people end up with default judgments because they do not show up in court. If you show up and demonstrate the debt is outside the state's SOL it doesn't matter if you once owed it or not, the case will be dropped).
- 3). Pull your credit reports. A debt can only report on your credit reports for 180 days + 7 years from the date of last activity. The Date of last activity is the date on which the account first went delinquent. If you find that a debt is listed on your report that is older than 7.5 years you need to immediately call the reporter of that debt and demand that it be removed. You may also find that the date is "fudged" to keep the debt on your report for longer. In these cases you need to immediately file a report with the Federal Trade Commission and the Credit Reporting Agency that is reporting the invalid debt. A good threat to sue sometimes brings the collections agency around and the reaged debt will mysteriously disappear. Whatever you do, do not ignore it.
- 4). Once you know that the debt is outside the SOL for your state and that it isn't hanging around on your credit report, you need to send the collection agency contacting you a full Cease and Desist letter. A C&D letter merely states that they are in no way, form or fashion to contact you again via any medium. They cannot telephone or send mail or email.
- 5). Inform them of the law. Along with your C&D letter you should make it known that the debt is outside the SOL for your state and is therefore time-barred. Because of this, if they sell the debt to another collection agency, transfer the debt, or attempt to report to your credit report over the debt you will not hesitate to seek legal counsel and file a lawsuit. Mean what you say. Don't allow yourself to be pushed around.
- 6). Sign up for a credit monitoring service. If you can afford it, its a good idea to do this for at least 6 months following a brush with a time barred debt. Make sure, however, to use one of the credit monitoring services offered through the Credit Reporting Agencies as those tend to be the most legitimate. These services will alert you anytime someone attempts to post anything to your credit report.
- 7). Have some faith in yourself. You are more than capable of dealing with collection agencies yourself. Don't go out and pay hundreds of dollars every month to ANY sort of credit counseling or debt management company. 99% of them are scams. Hire a credit specialist, an attorney, or do your own research and do it yourself. You'll be surprised what you can accomplish.
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